In the vertical segment of the aggregate supply curve,
A) different levels of GDP correspond with high unemployment.
B) competition among producers for already-employed resources can succeed only in lowering the economy's price level.
C) full employment is achieved.
D) producers are able to hire more workers at lower wages.
E) increases in GDP are due solely to production gains.

Question

Quizplus · Accepted Answer

In the vertical segment of the aggregate supply curve, the economy is at full employment, meaning all resources are fully utilized, and output cannot increase without causing inflation.

In the Vertical Segment of the Aggregate Supply Curve